Monopolies

This week we are discussing the concept of Monopolies and, being a sports junkie I am interested in the relation to professional sports. The definition of a monopoly includes the following criteria:

- A market with a single supplier
- No close substitutes
- Barriers to entry

I would like to examine these requirements in relation to Major League Baseball in order to determine how much of a monopoly the sport truly is.

First off, the criteria of a market with a single supplier is both true and not so true in that we can consider minor league baseball as a division of the MLB so they are not competition for the big club. In a worldwide sense there are other popular professional leagues like the Japanese League but none as popular as MLB. Some people would stop there and determine that MLB meets this criteria but I would argue that we can also group the NFL, NHL, NBA, and other professional in with the MLB and say that there is some competition. Often times the public is forced to decide to spend money at one event and not the other so this would disqualify MLB from being the single supplier.

The second criteria of no close substitutes is also disqualified by the other professional leagues for many consumers but a die hard baseball fan will not be accepting of a basketball game instead of a baseball game. That fan may be able to substitute a local high school baseball game instead of going to a major league game though, so ultimately this criteria depends on the individual and not the group.

Finally, there are a great number of barriers to entry involved in professional baseball which make it impossible for someone off the street to just start a team. A rival league would take not only a lot of money but it would require the collaboration of multiple cities and businessmen making it very unlikely.

After breaking Major League Baseball down into the three requirements I would conclude that there is not a clear cut answer to whether or not MLB is a monopoly. If you are a potential major leaguer or an avid fan of baseball then in many ways it is a monopoly. However, if you are a casual fan or a die hard sports fanatic then the numerous options for enjoying different professional sports make this not a monopoly but rather another option in the sports market.